2013 was the year where the threat of removing the QE punchbowl provoked market panic, while the EU was instrumental in sinister programs of theft above and beyond even the rapacious 'Central Bankers’ party'...

We began 2013 with the euro crisis yet to be cured, and indeed as
we end the year it remains the fiscal elephant in the room. A
volcano apparently dormant but clearly still active beneath the
crater. Quite when it will next erupt nobody knows, but even
Christine Lagarde of the IMF was keen during December to remind
us that the crisis was far from resolved.

However, 2013 was the year where certain governments continued to
be immolated on a symbolic funeral pyre as euro authorities
sought to keep the flawed single currency alive
at any price. Bank customers in Cyprus,
ranging from Russian companies, through a significant quantity of
the companies quoted on the Warsaw Stock Exchange and many
individuals across the world found their assets appropriated.
Rather than burn bondholders and others holding risk capital
(Germany protected its bankers as they did in Ireland and
elsewhere), the depositors found their deposits being stolen. The
theft axis was one which carried on throughout the year. In an
audacious deployment of arcane EU accounting rules previously
exploited by Hungary, the Polish government de facto confiscated
over half the nation’s private pension funds in an attempt to
make up for their inadequate fiscal management.

Ultimately, most global citizens ended the year with their
pockets having been picked in some way by rapacious governments,
albeit through stealthy means... The daft policy of Quantitative
Easing continued apace. In the vanguard remained the Federal
Reserve handing bankers a cool 85 billion dollars every month to
perpetuate the largely bankrupt system. During 2013, the US alone
every month spent twice the annual GDP of Serbia in a balance
sheet shuffle which a non-economist might prosaically term a
confidence trick.

Even some traditional congressional spendthrifts have realised
they can’t maintain this suicidal ‘rob Peter to pay
bankers’ policy. Thus the second half of 2013 was spent
obsessing about the ultimate financial terror (aside from the
bankers’ previous hegemony). Outgoing Fed Chairman Ben Bernanke
plotted a way out of the ‘crazynomics’ created by the ill-considered QE
policy knee jerk after the credit crunch.

At first mention of a taper, markets panicked and, just like
2008, politicians lost their nerve. The taper was hastily
postponed while the Fed endeavoured to counsel the markets to
avoid what remains a case of Stockholm syndrome between banks and
government. Ben Bernanke’s parting retirement gesture has been to
taper by a rather derisory 10 billion dollars per month in the
New Year.

For those lost in the arcane minutiae of quantitative easing (who
isn’t?), it remains true that government oversaw a crazy party
during the last decade where politicians maintained a delusion
that they could inflate property markets with impunity. Banks
joined the party and the result was chaos when inevitably the
boom cycle led to bust. Sadly the party has long ended in the
real economy but the bankers are being lubricated by a central
banker punchbowl which the Fed is trying to gradually siphon out
of the bar.

However, the damage has already been done and hence the terror of
theft mentioned earlier will likely soon become post taper
terror. Western politicians of left and right have successfully
created a dangerous whirlpool of QE debt which has fed massive
asset inflation - from fine art to classic cars through all
manner of investment markets.

A day of QE reckoning is coming and the mood on the streets is
understandably angry as normal business has been left behind in
the bizarre escalation of a central bank spending spree which has
only proven the ultimate impotence of government to create
tangible wealth. Ironically it is the very banking elite the G20
pledged to curtail (Pittsburgh 2009) which have profited as
everybody else has felt their wealth reduced through higher
taxes, lower savings rates and the colossal failure of this
unprecedented government interventionist phase to actually
deliver any benefits to the economy at large. At least one could
argue that some governments have finally succeeded with
redistribution of wealth - problem is the people have paid to
keep bankers and the absolute richest on their pedestals.

Sooner or later the taper will give way to terror and an
incredible rebalancing will begin. However 2013 was dominated by
what amounts to tawdry theft.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.